American Financial Group Posts Profit

NU Online News Service, Feb. 19, 2:23 p.m.EST?American Financial Group reported a 2002fourth-quarter net increase of $12.7 million, or 18 cents a share,over the period in 2001.

The company reported a fourth-quarter profit of $44.2 million,or 64 cents per share, compared with $31.5 million, or 46 cents pershare, one year ago.

The Cincinnati-based insurer stated its revenue rose to $952..9million from $939.4 million while gross written premiums in its p-cand specialty segments increased.

The company stated its p-c group generated an underwritingprofit of $17.2 million in the fourth quarter, excluding anasbestos litigation charge. The group's combined ratio of 97percent in that quarter reflects a three-point improvement comparedwith the period in the prior year.

Gross written premiums jumped five percent for the quarterthanks to continued strong growth in the specialty group, whichreported an underwriting profit of $7.2 million in the quarter,American Financial said.

Also, earlier this month American Financial?s Infinity p-c unitraised $198 million in an initial public share offering on theNasdaq Exchange.

American Financial also noted that its latest results includedan after-tax charge of $19.5 million related to an asbestoslitigation settlement.

Under that agreement, the company's subsidiary, Great AmericanInsurance Company, has agreed to settle asbestos-related coveragelitigation from insurance policies issued in the 1970's and 1980'sfor $123.5 million before tax. But all except $30 million will becovered by previously established reserves and anticipatedreinsurance recoverables. As a result, American Financial hasrecorded a charge of $30 million--$19.5 million after-tax--for thefourth quarter.

Carl H. Lindner, chairman and chief executive officer atAmerican Financial, noted that the company's strategic focus inspecialty commercial lines and the favorable trends in commercialinsurance markets would contribute to further improvements in itsoperating earnings in 2003 and beyond.

"Our overall property and casualty operations generated a solidunderwriting profit in the 2002 fourth quarter and reported acombined ratio just under 100 percent for the year," Mr. Lindnersaid.

He noted that, "For the past several years, we have beenrealigning our mix of business and focusing on rate adequacy. Wehave continued to tell the market that we were committed toachieving underwriting profits and that we would sacrifice volumefor profits. I believe the improvement in our results demonstratesthat commitment," he said.

American Financial offers p-c and specialty lines, includingworkers' compensation, professional liability, ocean and inlandmarine, and multiperil crop insurance, as well as automotiveinsurance. The company also owns some 30 percent of banana growerChiquita Brands International.